RCE Capital

Below is the article publised in today's The Star newspaper. Short term target is RM1.20 while the next projection is around RM1.40-RM1.50. Meanwhile, Oriental Business also published an article about RCE and target price is RM1.33 from an unnamed analyst. Base on the short term target price, an investor would be able to enjoy ~20% return. RCE should a rising star for 2007. Goldman Sachs is another important factor that has raised the profile of RCE.


RCE Capital Bhd has been on the steep upward momentum on persistent follow-through buying interest over the past several months, navigating the shares into the unknown territory to establish a fresh all-time high of RM1.01 during intra-day session yesterday.

Based on the daily bar chart, prices had climbed quite substantially since staging a major breakout of the 52 sen level sometime in February, but they show no sign of abating just yet, at least for now.

Perhaps, investors who are already in it can consider holding on to their shares for more capital gains.

Technically, the oscillator per cent K reversed upward from the neutral zone and crossed over the oscillator per cent D of the daily slow-stochastic momentum index to trigger a short-term buy on Thursday.

Similarly, the 14-day relative strength index headed higher towards the bullish territory.

In addition, the moving average convergence/divergence indicator continued to expand positively against the signal line.

On the back of the bullish reading, prices are likely to move forward, targeting the RM1.20 mark in the short-term.

The next upside projection is seen around the RM1.40-RM1.50 band.

As for the downside, initial support is anticipated at 95 sen. An additional floor is pegged at the 90 sen level.

Salary play

WHILE civil servants are celebrating an upcoming salary revision, companies such as RCE Capital Bhd are rejoicing as well. The company, which has its mainstay in the provision of consumer credit facilities for Government servants seems a likely beneficiary of the pay hike.

According to research house Aseambankers, RCE Capital’s loans book has grown substantially over the past few years. As at March this year, RCE Capital’s principal amount of its total loan was about RM500mil, up from less than RM70mil in 2002.

Aseambankers says, “With the regulated personal loan and consumption credit market in Malaysia worth approximately RM25bil, this implies tremendous opportunity for RCE Capital to grow its market share and loans book further. And, given higher consumption power that could be derived from an upcoming salary revision in the civil service, we expect RCE Capital’s position to strengthen significantly.”